Inefficiency can be caused in a market by the presence of（）
A. market power
B. externalities
C. imperfectly competitive markets
D. All the answers are correct
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Coffee and tea are substitutes. Bad weather that sharply reduces the coffee bean harvest would（）
A. increase consumer surplus in the market for coffee and decrease producer surplus in the market for tea
B. increase consumer surplus in the market for coffee and increase producer surplus in the market for tea
C. decrease consumer surplus in the market for coffee and increase producer surplus in the market for tea
D. decrease consumer surplus in the market for coffee and decrease producer surplus in the market for tea
If the current allocation of resources in the market for hammers is inefficient, then it must be the case that（）
A. producer surplus exceeds consumer surplus in the market for hammers
B. consumer surplus exceeds producer surplus in the market for hammers
C. the sum of consumer surplus and producer surplus could be increased by moving to a different allocation of resources
D. the costs that sellers of hammers are incurring could be reduced by moving to a different allocation of resources
Which of the following is correct（）
A. Consumer surplus refers to a situation in which there are more buyers than sellers in a market
B. Producer surplus refers to a situation in which there are more sellers than buyers in a market
C. Total surplus is measured as the area below the demand curve and above the supply curve, up to the equilibrium quantity
D. All the answers are correct
An externality is an example of（）
A. a corrective tax
B. a tradable pollution permit
C. a market failure
D. an equilibrium
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